If you felt like getting unlimited streaming video as well as DVDs in the mail for just $9.99 a month was too good to be true…you were probably right.
Netflix has announced that it is changing its pricing model – and thing’s aren’t getting any cheaper.
Instead of the awesome $9.99 streaming/rental combo there will be two separate plans for the services at $7.99 each and a combined service for $15.98 a month. That’s a 60% price increase!
You’ve probably already heard people complaining about it – or maybe you have gone into mourning yourself.
But the writing was on the wall for some time now…
So a few weeks ago I thought I’d check out the movie Easy A through Netflix streaming. – but it had disappeared!
That’s because Sony and Starz pulled all its movies from the Netflix streaming services over a contract issue. Apparently there was something triggered in the contract when Netflix reached a certain number of subscribers.
As you might expect – the issue can only be resolved one way. Netflix needs to pay more money. So they’ve got to ask you for more of it.
Right now Netflix is paying $30 million a year for movies from Starz. But CEO Reed Hastings said he thought his company could end up paying as much as $200 million a year when the new deal is done.
There have been critics that have said the Netflix business model can’t be sustained. It was too cheap, subscribers were growing at twice the rate of revenue.
Plus, the big studios didn’t like the fact that folks could get new releases from Netflix so quickly. Now you have to wait 28 days to get most newer rentals unless you pony up and buy the DVD or BluRay. The same thing happened for services like Redbox.
So you could make the argument that Hollywood is to blame for the price hike and not Netflix. But the truth is – Netflix is part of Hollywood now.
With 24-million subscribers in the U.S. alone, Netflix is now the main player in getting movies into homes. It’s no surprise any surprise that corporations like Sony want a bigger piece of the action?
Have you noticed the out-of-business video rental stores in your neighborhood?
Netflix put them into bankruptcy.
Stores like Blockbuster and Hollywood Video started offering things like premium memberships and movies by mail, but they still couldn’t compete. People switched because Netflix was cheaper, more convenient and offered a massive selection.
Of course Netflix is going to raise prices now. Why? Because they can! What are you going to do about it? Cancel?
Maybe…
An “informal survey” conducted by the technology website CNet.com indicates as much as 41% of Netflix users plan to cancel the service completely!
Tim Stevens, editor-in-chief of engadget.com has interesting editorial on the Netflix announcement. Stevens says Netflix made a huge mistake by spilling the news about the price increase without adding a bunch of new content or announcing anything positive. But he does think it could mean better stuff from Netflix in the future.
“To say “our service today is worth 50 percent more than it cost yesterday” is awfully brash when that service hasn’t changed a lick over that 24-hour period…This extra money coming in will help Netflix to go after more and better content, and to get it earlier — but with this big price hike the company runs a real risk of alienating its subscribers.”
That risk became very apparent after yesterday’s announcement. Thousands and thousands of people complained on the Netflix Facebook page. Others used social medial outlets to announce they’d be quitting.
Getting a great deal ripped from your hands isn’t the best feeling in the world. But I’d be willing to bet that Netflix expects most of you to stick around.
Think about how things used to be…
If you rented from Blockbuster, most DVDs and definitely new releases were about $4 a pop anyway. You’d surpass the $15.98 per month after renting just 4 movies – and that’s without possible late fees.
Tim Stevens from engadget.com has another suggestion for Netflix. He thinks the company should take a hint from Redbox and start charging per disc for movies in the mail. That way you could pay the $7.99 for streaming but would only pay a couple bucks for each DVD you had delivered to your door.
“With that I could still get the odd disc when I’m particularly hot for a new release but not be stuck paying $8 a month for the privilege of having a red envelope sit unopened on my coffee table.”
Read more about Stevens’ idea at engadget.com.
If you’re committed to quitting the red envelopes – read about these Netflix alternatives and see if there’s something that fits for you.
New subscribers to Netflix will see the price structure change immediately. Current Netflix users need to decide what they’re going to do by September 1st.
So we want to know…
If you have Netflix what do you plan to do. Cancel, stick with it, just pick either streaming only, or movies by mail only?
Do you have any better ideas about how Netflix could start charging more without ticking off all it’s users?
Leave a comment and tell us about it!
Here’s a way to get some FREE MOVIES on Check Advantage!
I haven’t mentioned this yet but we’re in the middle of a sweet giveaway over on our Facebook page. We’re giving away three $100 Best But gift cards this Friday.
Head over to http://www.facebook.com/checkadvantage and “Like” us if you haven’t already. Then take the short survey for you chance to win one of the $100 gift cards and buy your own movies!
Current fans can also take the survey (look for the “Quiz” tab on the left hand side of the page).
We’ll contact the winner’s by email on Friday afternoon.
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+Kasey Steinbrinck is a former TV news producer and newspaper reporter who is now the lead blogger for Check Advantage. The online printer of cool checks and QuickBooks checks offers cool checks . Contact Kasey if you’d like free content created for your website or blog.
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{ 2 comments… read them below or add one }
I only used the streaming, so it make no differnce to me. A lot of people are upset about this change, but doubt many of them will drop it. $15.98 a month isn’t horrible for unlimited movies. Compare it to HBO or Showtime, cable is expensive.
Right now I only have streaming too, but would definitely appreciate a little better selection. I think the idea of adding pay-per disc to Netflix streaming would be great. Their actual library is pretty fantastic. Until then…I’ll just get new(er) releases from Redbox.